Monthly Archives: October 2012

There is a new tax coming in 2013 that was enacted along with the health care legislation in 2010. One of the components of the new 3.8 percent tax is a potential tax because of a gain on the sale of your home. The National Association of Realtors (NAR) has put together a 10 point summary which follows. The tax will vary for every situation and individual because there will be different gains, various income levels, and different AGI (Adjusted Gross Income). It is important to seek help if needed from a tax professional.

When you add up all of your income from every possible source, and that total is less than $200,000 ($250,000 on a joint tax return), you will not be subject to this tax.

The 3.8% tax will never be collected as a transfer tax on real estate of any type, so you’ll never pay this tax at the time that you purchase a home or other investment property.

You’ll never pay this tax at settlement when you sell your home or investment property. Any capital gain you realize at settlement is just one component of that year’s gross income.

If you sell your principal residence, you will still receive the full benefit of the $250,000 (single tax return)/$500,000 (married filing joint tax return) exclusion on the sale of that home. If your capital gain is greater than these amounts, then you will include any gain above these amounts as income on your Form 1040 tax return. Even then, if your total income (including this taxable portion of gain on your residence) is less than the $200,000/$250,000 amounts, you will not pay this tax. If your total income is more than these amounts, a formula will protect some portion of your investment.

The tax applies to other types of investment income, not just real estate. If your income is more than the $200,000/$250,000 amount, then the tax formula will be applied to capital gains, interest income, dividend income and net rents (i.e., rents after expenses).

The tax goes into effect in 2013. If you have investment income in 2013, you won’t pay the 3.8% tax until you file your 2013 Form 1040 tax return in 2014. The 3.8% tax for any later year will be paid in the following calendar year when the tax returns are filed.

In any particular year, if you have no income from capital gains, rents, interest or dividends, you’ll never pay this tax, even if you have millions of dollars of other types of income.

The formula that determines the amount of 3.8% tax due will always protect $200,000 ($250,000 on a joint return) of your income from any burden of the 3.8% tax. For example, if you are single and have a total of $201,000 income, the 3.8% tax would never be imposed on more than $1,000.

It’s true that investment income from rents on an investment property could be subject to the 3.8% tax. But: The only rental income that would be included in your gross income and therefore possibly subject to the tax is net rental income: gross rents minus expenses like depreciation, interest, property tax, maintenance and utilities.

The tax was enacted along with the health care legislation in 2010. It was added to the package just hours before the final vote and without review. NAR strongly opposed the tax at the time, and remains hopeful that it will not go into effect. The tax will no doubt be debated during the upcoming tax reform debates in 2013.

Are we raising our teenagers to be antisocial or is this their new way of social living? Are we giving them enough family time? Are we too busy with our adult life, work, house, etc…?

In our days, morning breakfast and family meals, were a part of a healthy family routine, great time to talk, make jokes, and plan a day of activities. Now our kids socialize on the internet, play virtual games and spend their day on Skype. How much of this is too much… Are they antisocial or addicted???

How can we break those habits that are driving us crazy? Creating a family weekend by getting more involved, going out to cool places they like, playing fun activities with them. Don’t forget to keep their friends in the loop. Create a group with other families.

Let us help our teens by creating a great ideas list. Join the blog by inputting your favorite family activities, or new ways we can keep them busy at home and I will update the list on the blog.

We all know someone who thinks differently from us. Maybe we look at them as quirky, odd, or even worse….a jerk! People are different and this happens because of what section of the brain is more dominant. If we can all understand the way another person’s brain works, it would go a long way towards acceptance and even being able to work together.

Many years ago, before my real estate career, I worked for a large, local manufacturing company. In the early 80’s they offered a seminar that had to do with understanding “Right Brain – Left Brain” and groups of people who worked together went off to spend a day learning and understanding the way our brains and our co-workers brains worked.

The first thing the leader did was to select 2 groups of five. Each group was given an assignment and they were told to go off separately for 15 minutes and then report back to the group with the results. What we didn’t know was one group was made up of the most left brained and the other was the most right brained from our group. The seminar leader then told the rest of us what was going to happen. We all laughed and thought he was crazy, but when the groups returned, the results were as predicted. The left brainers came back with a completed assignment, they had a leader, and the results were presented in a structured outline. The right brainers came back with an incomplete assignment, had gotten off topic, and they were unfocused on the assignment. To see these predicted results was amazing!

The brain is divided into 4 quadrants – upper and lower left and upper and lower right. A good way to look at what each side does is the following chart found on www.viewzone.com

The left brain person is better at math while the right brain person is better at art. Nurses are right brained (caring), while engineers and scientists (analytical) are left brained. This is such a fascinating subject and there is so much to learn and understand. If it interests you, you should try to find books and/or courses that might offer you a more complete understanding. If there’s a person in your life (family, work, friend) who you feel doesn’t understand you, perhaps the problem lies in the way you each think. With an understanding of the reasons for this, it may help bring you both closer.

About the author: Roland Spadafora is one of the broker owners of RE/MAX Legacy and although he shares some right brain characteristics he tends to be more left brain. You can learn more about him on his website www.spadaforateam.com

The first annual RE/MAX Legacy Yard Sale and Food Drive was a huge success thanks to all the support from the community! The rain held off for the most part and we were able to raise $325 plus a whole lot of food donations for the Woburn Food Pantry! Thank you to everyone who donated “stuff” and for all those who came out and bought it!! The support from the community was overwhelming! Without you this could not have been possible! View some photos from this event on our Facebook Page

RE/MAX Legacy would especially like to thank all those who donated various things to make make this event possible